GST council clears compensation bill, to next meet in March

New Delhi, Feb. 18 -- The goods and services tax (GST) council on Saturday gave its final nod to a bill that will guarantee compensation to the states in case of revenue losses arising from a transition to GST.
However, the council did not give its final nod to the other three supporting legislations crucial for the implementation of this new indirect tax regime-the central GST (C-GST), the state GST (S-GST) and the integrated GST (I-GST) bills. These bills will now be taken up in the next meeting of the GST council on 4-5 March in New Delhi.
In a press conference after the conclusion of the tenth GST council meeting in Udaipur, finance minister Arun Jaitley said the endeavour of the government will be to table these supporting legislations in the second half of the budget session beginning 9 March.
He added that the legal vetting of the C-GST and S-GST bills had thrown up the need for clarifications on some of the provisions from the council. These issues include the constitution of the appeals tribunal under GST, the definition of agriculture, the exemptions that have to be given during the transition phase, delegation of powers under GST, treatment of the works contract and the fineprint of the composition scheme wherein taxpayers with a revenue threshold of up to Rs50 lakh can pay a fixed tax rate and reduce the procedural requirements.
"The legal vetting of these bills threw up these issues. The council has given its opinion on all these issues and these will now be incorporated into the laws. These will be brought to the GST council and hopefully the GST council will approve these laws in the 4-5 March meeting," said Jaitley.
Jaitley added that the GST compensation law, which guarantees to provide compensation to states for 5 years for any revenue losses under GST, will now be taken to the Union cabinet for its approval before it is tabled in Parliament.
The passage of the C-GST, I-GST and compensation bills by Parliament in the second half of the budget session will be crucial for the rollout of GST from 1 July. The state legislative assemblies also have to pass the S-GST law.
Jaitley said that once the bills are cleared by the council, the next stage will be to fit the items into the various tax slabs.
He added that the council had decided against giving powers to the Comptroller and Auditor General of India (CAG) under the indirect tax act arguing that it already has powers to scrutinize the finances under the CAG act.
"CAG is already empowered under the CAG act to call for any information from the government in relation to public finances. Under the taxation law, it need not be separately given. The income tax act has not given any separate powers to CAG. Why should there be any separate powers under the indirect tax act?" Jaitley said.